INDIANAPOLIS – The Indiana Securities Division announced that it has joined a multi-state settlement with Robinhood Financial LLC, which will pay up to $10.2 million in penalties for operational and technical failures that harmed Main Street investors. Indiana will receive $200,000 as its share of this settlement.
The settlement stems from an investigation spearheaded by several state securities regulators and coordinated through the North American Securities Administrators Association (NASAA) regarding Robinhood’s operational failures with respect to the retail market.
The investigation was sparked by Robinhood platform outages in March 2020, a time when hundreds of thousands of investors were relying on the Robinhood app to make trades. In addition, prior to March 2021, there were deficiencies at Robinhood in its review and approval process for options and margin accounts, weaknesses in the firm’s monitoring and reporting tools, and insufficient customer service and escalation protocols that in some cases left Robinhood users unable to process trades even as the value of certain stocks was dropping.
“This agreement reflects the ongoing efforts by state securities regulators to protect investors, including Hoosiers to ensure that they are treated fairly by financial services firms,” said Indiana Secretary of State Diego Morales. The settlement funds will be distributed between the Securities Enforcement Fund and the State of Indiana General Fund.
